Senate Vote Shifts Put Congress at Increased Odds With President on Estate Tax

Four March Budget Amendments to Repeal or Reduce the Tax Are Defeated; One Passes

BOSTON-United for a Fair Economy has released a background report detailing significant new activity in legislation on the estate tax. Ten U.S. senators have shifted their positions away from supporting estate tax repeal. Another five who support the estate tax have been newly elected to seats previously held by opponents of the estate tax.

"Many people seem to think the estate tax issue has been settled," said Lee Farris, Senior Organizer for Estate Tax Policy at UFE. "On the contrary; the president's budget still proposes permanent repeal, and the estate tax will be gone for one year in 2010. As part of the budget process, senators are beginning to propose solutions to this situation."

Repealing the estate tax would cost the U.S. $1 trillion over the first ten years of full repeal. In 2007, the first $2 million of an estate ($4 million for a couple) is exempt. The share of estates taxed was 0.27% of all estates in 2006, and will drop to 0.16% of all estates in 2009 when the exemption level rises to $3.5 million per individual ($7 million per couple).

"With the national debt closing in on $9 trillion, it's good that senators are starting to realize that we cannot afford to give away hundreds of billions to America's wealthiest families," said Farris. "We need the money for more important things like relief for Katrina victims and better health care for our people and our veterans. Let's agree once and for all to preserve this significant revenue from one of the fairest taxes we have."

Under current law, the estate tax sunsets in 2010 before returning in 2011 at 2001 rates (exemptions of $1 million/individual and $2 million/couple, with a top tax rate of 55%).